Corporations: Retained earnings, dividends, treasury stock, and book value (LG 1
ID: 2392490 • Letter: C
Question
Corporations: Retained earnings, dividends, treasury stock, and book value (LG 1-5) The stockholders' equity section of Susan Corporation as of December 31, 2010, follows: Stockholders' Equity Paid-in capital Stock Preferred stock, 10% cumulative, $50 par value: 50,000 shares authorized, 4,000 shares issued Common stock, $1 par value: 400,000 shares authorized, 90,000 shares issued Total stock $290,000 Additional paid-in capital: Paid-n capital-excess over par value, common stock Total paid-in capital Retained earnings Total stockholders' equity $450,000 50Explanation / Answer
1.Journal
2. Equity of the stockholders
3.Computation of the book value per share of common stock
4.Here the retailed earnings be restricted for the treasury stock cost held.Hence the present cost of the treasury cost is restricted from the retained earnings is $54,000
Date Description of the account Debit Credit 7 Feb Dividends of stock 94500 Common stock dividends distributable 13500 Paid in capital in excess of pair-Common 81000 14 Mar Common stock dividends distributable 13500 Common stock 13500 19 April Treasury stock 72000 Cash 72000 9 May Accumulated depreciated 25000 Retained earnings 25000 5 Oct Cash 24000 Treasury stock 18000